The financing vehicles were in place for several years now for a borrower using some creativity with a seller to make 100% financing possible. However, the real estate market had been so bad in many areas in the U.S. With a softening market, creative financing is back as a helpful tool to allow sellers to unload their properties as long as an over supply of inventory exists.

Tom and Sandra had been renting a home in a suburban area for three years. They had been digging out from under a heavy debt load of medical collections. Sandra was leaving work one day and a truck had crossed the line and pinned her in her small car for a half an hour until the jaws-of-life was used to extract her out from her crushed vehicle. With a broken hip, ankle, eye socket and fibula a long recovery ensured and Sandra was not able to work for two years. The other driver was at fault, but any financial recovery was years down the road as the other insurance company was playing hardball.

In the meantime, with constant harassment for the out standing medical bills and the weight of credit card and installment debt that existed prior to the accident was just overwhelming. Harold had been working two jobs just to meet the basic family needs. Family help was limited and really wasn’t expected. Sandra’s therapy had been going on for a year now and real progress was being made. Her employer had kept her job open as a customer service representative ironically at a credit card service center. The benefits were limited and very little of the medical bills and rehab had been covered. Tom and Sandra had been seeking some financial advice from a local bankruptcy attorney. It was decided that with their level of income and huge medical bills that filing a Chapter 7 Bankruptcy action might be the best thing to do for mental sanity and cash flow. A Chapter 13-payback plan would be crippling for many years to come.

As the bankruptcy attorney explained to Tom and Sandra that in his practice example after example comes before him where just bad things happen to good people and that there was no shame in taking care of their financial affairs in this manner. The rationalization process followed.

Two months before filing the bankruptcy, the insurance company was offering a small settlement based on an allegation that Sandra may have temporarily been distracted by talking on her cell phone and thus reduced her reaction time. Rather than put up a long protracted fight Tom and Sandra, for better or worse settled for an amount that just covered her payoff on her totaled car. They were relieved of that installment. Their attorney for the accident urged them not to settle, but with Sandra’s eminent recovery and the stress of the whole ordeal, they grabbed what they could at the time.

Tom and Sandra received their notice of the Final Discharge of their Chapter 7 Bankruptcy. All the collections for medical bills, non-secured credit cards and one major medical bill that had resulted in a judgment being awarded for the first responding hospital had all been wiped out. They excluded their family car from the Bankruptcy matrix (which names all the debtors), which still had a $6,850 balance with a $295/month payment remaining.

They also excluded a credit card that they were authorized users and had a low balance and a low monthly payment. This allowed Tom and Sandra to maintain two trade lines and their on time rental payment of some $1,250/month outside the Bankruptcy action. Sandra had now been back to work at her old job for two weeks. She was fortunate to take advantage of a car pool with a fellow worker who lived a half mile away.

It was like the world had been lifted off their shoulders. Now Tom and Sandra had their rent, one car payment and a small credit card and their home utilities. The cell phone service had gone by the way side many months before.

Even through the most brutal times and the lowest of the low, Tom and Sandra, as their custom, visited Open Houses after church every Sunday. It was always in the neighborhood and never more than two home visitations. It was Tom and Sandra’s way to cope with the dark cloud that had beset them. During this process, they became familiar with a local Realtor who took a very personal interest in their situation. The Realtor, named Sherry, knew they were not ready to do anything until some things had been handled.

At the most recent Open House visit, Tom and Sandra shared that they had put their financial challenges behind them. Sandra was feeling great and off all her pain medication. Sherry raised the prospect and questioned them if she could figure out a way to get them into a home at a little more than they were paying in rent with little or no money out of pocket, would they have an interest at least in hearing more about it. Tom raised his hands with palms up and a shrug of the shoulders, and shared that it wouldn’t hurt to listen to some possibilities. The accident had caused a detour in the quest to own a home, but it had not killed their dream.

Sherry set up a meeting with the Realtor’s in-house mortgage broker to discuss their options. A joint credit report was pulled and as Tom at the time made the most money his middle score was utilized to qualify for a mortgage. His middle credit score was right at 500. The mortgage broker went on to explain that they would qualify for an 70% Loan To Value mortgage. Due to their lack of a cash down payment, it was added, that the only way that they could use this loan option would be with a seller held second of 30% loan to value with the seller also paying up to 6% of the contract selling price.

This would then give them a 100% Combined Loan To Value (CLTV). The loan would need to be a Fully Documented loan with verification for employment and income. The mortgage broker felt like he could present Sandra’s employment gap due to the accident and use her current income for qualifying purposes. Totaling up the income versus the debts, it was determined that Tom and Sandra could buy a home in the $175,000 range IF the seller would offer reasonable terms on the 2nd mortgage. Sherry piped in that she had been sitting on a listing for six months and the owner now may have an interest in holding some paper versus renting the property again and deal with the tenant challenges on repairs and upkeep. The home was close to their current residence.

Betty was able to work out the deal with reasonable terms on the second mortgage that would keep the overall monthly payment down at least for the first three years. As the mortgage broker explained, that should be plenty of time to establish a better credit history and qualify for a lower interest rate loan in two years. As an added bonus, the seller agreed to pay all the closing costs and prepaid expenses such as annual hazard insurance and tax escrows plus replacing a leaky roof. Tom and Sandra moved into their newly purchased home putting all the travails of the past in the rear view mirror.

Sometimes bad things happen to good people. In this current real estate market, there are creative possibilities. It won’t last forever; the time is at hand for seller help and creative financing.

Dale Rogers sellerhelpsbuyer brokencredit

Dale Rogers is a thirty-year mortgage veteran and frequent contributor to the Broken Credit Blog. The BCB is a free website created to assist the general public with information about credit repair and responsible mortgage lending.

What exactly is an “Exclusive Buyer’s Agent”?

A: An agent who represents only buyers, never sellers, with no risk to their buyers of dual or esignated agency on any home they want to buy.

B: An agent who represents their buyers as a designated agent if they want to buy a home that is an in-house listing.

C: An agent who gets paid regardless of whether the agent finds their buyers the home they want to buy or not.

The correct answer is “It depends on who you ask”. Let’s discuss each of the scenarios above:

A: An exclusive buyer’s agent is an agent who represents only buyers, never sellers, with no risk to their buyers of dual or designated agency on any home they want to buy.

This is the definition you would find in “Don’t Risk It! A Broker’s Guide to Risk Management”, published by the National Association of Realtors in 2000: “Exclusive Buyer Representation - Also called exclusive buyer agency, this the practice of representing only buyers, never sellers. The company never lists
a seller’s property and thus never has a seller as a client.”

The definition above is also the definition used by the news media in articles written for the benefit of home buyers who are looking for consumer advice in preparation for the purchase of real estate. Internationally acclaimed finance specialist Suze Orman endorses the National Association of Exclusive Buyer’s Agents in the “Finding a Buyer’s Agent” section of her popular web site, http://www.suzeorman.com. Consumer advice columnists Ilyce Glink and Robert Bruss recommend exclusive buyer agency as an alternative to buyer agency to consumers who want to avoid the
risk of dual agency - when one broker represents both parties. Ilyce Glink advises: “If you’re trying to eliminate potential conflicts in your deal, you may want to try (exclusive buyer agency). Exclusive buyer’s agents never represent sellers. They only represent buyers, and they typically will take buyers
wherever they want to go in a metro area.”. Robert Bruss differentiates between the different types of buyer agency services in his article Do Home Buyers Need Their Own Agent?:
“Any real estate agent can be a buyer’s agent to help locate your home purchase. In addition, there are a few exclusive buyers’ agents who represent only home buyers, never accepting
listings from home sellers.”

And June Fletcher from the Wall St. Journal.com writes:
“Exclusive buyers agents can focus on their customers and their needs in a way many sellers agents can’t. They don’t have to spend their time holding open houses, staging properties, or
doing all the other marketing tasks that consume much of a listing agent’s time. They can concentrate on previewing homes, investigating comparable houses, helping the buyer understand
financing options, negotiating the deal and making sure all the inspections and escrow items are done in a timely manner.

What’s more, home shoppers who use exclusive buyers agents don’t run the risk of falling in love with one of their agent’s own listings. When that happens, the agent becomes a dual agent
– beholden to both the seller and the buyer, and thus, beholden to no one. Because this limits the amount of advocacy and advice the professional can give either party (for instance, a dual
agent can’t tell the seller the highest price that a buyer is willing to pay), it’s illegal in some states.”:
http://www.realestatejournal.com

B: An exclusive buyer’s agent is an agent who represents their buyers as a designated agent if they want to buy a home that is an in-house listing.

The news media is doing a great job of advising consumers to ask for an exclusive buyer’s agent in order to avoid the the conflict of interests that exists with dual and designated agency
(which legally is “dual agency” in NC, since the same broker represents both parties.) But the problem is now that consumers have started asking for an exclusive buyer’s agent, listing agents are representing themselves to consumers as “exclusive buyer’s agents,” and are advising consumers they can provide
exclusive buyer agency representation - even on in-house listings! The reason for this is that the NC Real Estate Commission does not recognize the definition for exclusive buyer’s agent published by NAR in 2000, and since then, picked up and popularized by the mainstream news media. As a result,
many real estate agents who practice designated agency on in-house listings regularly advertise themselves to consumers as “exclusive buyer’s agents.”

C: An exclusive buyer’s agent is an agent who gets paid regardless of whether the agent finds their buyers the home they want to buy or not.

The NC Real Estate Commission allows NC real estate agents to call themselves an exclusive buyer’s agent if their buyer client signs an “Exclusive Buyer Agency Agreement.” The NC Exclusive
Buyer Agency Agreement is a contract which states that the buyer’s agent gets paid no matter who finds the home, and restricts the buyer to the buyer agency services of the agent/firm with whom the buyer has the buyer agency agreement. The NC Real Estate Commission acknowledges this usage of the term is pervasive throughout the industry in NC, but does not consider it a deceptive practice because no legal definition for this term exists in NC. The following terms: “Buyer’s Agent, Seller’s
Agent, Dual Agent, and Designated Agent” are all defined in the state mandated Consumer Disclosure Brochure called “Working With Real Estate Agents,” but the definition for “Exclusive Buyer’s/Seller’s Agent” is a glaring omission from the agency options that are disclosed to consumers in this brochure.

In many states including NC, “Buyer Beware” remains the adage for consumers who want an exclusive buyer’s agent to represent them in their next real estate purchase transaction. A refreshing
exception is Ohio, where their state legal disclosure, “Consumer Guide to Agency Relationships,” was developed jointly by the Ohio Association of Realtors and the Ohio Division of Real Estate
and Professional Licensing. Under Ohio license law, each brokerage must disclose which of five agency policy options their company practices and offers to consumers, including an option for exclusive buyer agency: “Under this policy, your brokerage only represents buyers, and does not take listings, practice
subagency or dual agency.”

Real Estate industry expert and columnist Peter Miller sums up the argument best for including exclusive buyer agency as an additional agency option in the NC Consumer Disclosure Brochure:
“Brokerages should always include listing brokers and buyer brokers, exclusive or not, so that individual professionals can pick the practice strategy they prefer while consumers can find the widest array of services. Exclusive buyer brokers changed the marketplace by popularizing the core concept of buyer brokerage.
That’s a transition which now helps millions of purchasers get a better deal in the marketplace - and that is a significant accomplishment.”

Since no legal regulation for exclusive buyer agency exists in NC, before proceeding with a self-proclaimed “Exclusive Buyer’s Agent,” consumers are advised to question their real estate
agent’s interpretation of this loaded real estate term.

———————————————————-
Julie P. Tuggle is broker-owner of Carolina Buyer’s Agent, an exclusive buyer agency in Charlotte, North Carolina that represents only buyers, never sellers, on the purchase of Charlotte homes charlotte-eba.com with no risk to their buyer-clients of dual or designated agency
representation on any home they want to buy. Julie can be reached at: mailto:juliet@charlotte-eba.com

Rehabbing Baltimore Houses

Flipping Baltimore Houses, Rehabbing, and Landlords

Who Makes the Most Money Investing in Real Estate?

There are countless ways to make money in real estate. Two trendy and proven ways are flipping houses and a landlord. Frequently, both of these techniques entail fixing or rehabbing the property for higher profits.
Flipping Houses to Make Money.

Government Foreclosures Guide
You can buy a Government home for you to live in, or simply to rehab and sell for …..

House flippers buy up property at a low price and quick turn it for a profit. Numerous tactics for flipping houses include:
1. Turning Contracts. Many investors find a bargain house owned by a desperate seller and get a contract to purchase. They then sell the contract to another investor or to an owner-occupant home owner.

This method requires great negotiating skills and knowledge of the current market. You must know how to move the contract or you make no money and unfairly tie up the home owner. Successful flippers repeat the system over and over: contract, sell, buy–and make modest gains on each transaction.

This method helps beginning investors make quick money to get a bankroll to buy more houses.

2. Buy Ugly Houses, Fix and Flip. Another flipping method is to purchase bargain property either with financing or cash. In this strategy, the flipper becomes the fixer and makes the money that the investor would make in the “turning contracts” system.

3. Buy Pretty Houses and Flip. Not all bargain houses are fixers. You can find sellers whose homes are in perfect condition but their personal life makes keeping the house impossible. The key to getting a pretty house from a needy seller is to be ready to cash the seller out with pre-arranged financing or cash.

Landlords to Make a Fortune

Wealthy real estate investors buy properties as long term investments. Rent brings in a consistent, positive cash flow if the properties are purchased at the right price and rented for maximum profits. Investors frequently fix up the properties for higher rents. Not only do the landlords receive cash flow each month, they get tenants to pay the mortgage for them and over time the value of the property appreciates.

Both flipping and landlords make money when you buy low, rent smart, and sell for top dollar. However, over time, landlords make the fortunes investing in real estate.

Free ebook: The Truth about Making Money Flipping Houses at http://www.doghousetodollhousefordollars.com